TORTS – NEGLIGENCE – ESSENTIALS OF ACTIONS NEGLIGENCE –
DUTY OF CARE –WHERE PURE ECONOMIC OR FINANCIAL LOSS
– Where
plaintiff purchased a boat from a boat dealer who had purchased the boat from
Source
Original judgment source is linked above.
Catchwords
TORTS – NEGLIGENCE – ESSENTIALS OF ACTIONS NEGLIGENCE –DUTY OF CARE –WHERE PURE ECONOMIC OR FINANCIAL LOSS– Whereplaintiff purchased a boat from a boat dealer who had purchased the boat fromthe manufacturer –Where the plaintiffpurchased the boat for commercialgame fishing charter purpose – Where quality of the design andconstruction in contention– Where plaintiff claims damages for the tortof negligence for pure economic loss being loss of value or cost of repairs–Whether boat manufacturer owed duty of care to subsequent purchaser– Whether there is a general duty of care upon a manufacturerof chattelnot to cause economic loss to subsequent purchasers of defective productsTRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMERPROTECTION LEGISLATION – CONSUMER PROTECTION – LIABILITYOFMANUFACTURERS OR IMPORTERS FOR DEFECTIVE GOODS – Where the plaintiffcontended that a boat purchased was by supply to a
consumer – Whether a
crewed boat charter is a “supply” of goods – Whether sale of a
PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS
– AMENDMENT
– Where plaintiff applies for leave to amend its statement of claim to
plead additional causes of action
– Where causes of action are barred by
statutory limitation period – Whether causes of action are founded on the
same
facts or substantially same facts as the existing causes of action –
Whether leave ought be given
WORDS AND PHRASES – “supply”, “limitation
period”
Civil Proceeding Act 2011 (Qld), s 16 Rules of the Supreme
Court (Qld), O 32 Sale of Goods Act 1923 (NSW), s 19 Trade
Practices Act 1974 (Qld), s 4, s 4B, s 6, s 74B, s 74 D, s74G, s 74J
Uniform Civil Procedure Rules 1999 (Qld), r 5, r 293, r 375, r 376, r
376, r 377, r 378 Astley v Austrust Ltd [1999]
HCA 6
(1999) 197 CLR 1, considered Barclay v Penberthy [2012]
HCA 40
(2012) 291 ALR 608, considered Bow Valley Husky (Bermuda) Ltd
v Saint John Shipbuilding Ltd (1997) 153 DLR (4th) 385
[1997] 3 SCR 1210, consideredBryan
v Maloney [1995]
HCA 17
(1995) 128 CLR 609, considered Caltex Oil (Aust) Pty Ltd v
The Dredge Willemstad [1976] HCA 65
(1976) 136 CLR 529, considered Cattle v Stockton Waterworks Co (1875)
LR 10 QB 453, cited Coldham-Fussell & Ors v
Commissioner of Taxation [2011] QCA 45
(2011) 82 ACSR 439, considered Derry v Peek (1880) 14 App Cas 337,
considered Donoghue v Stevenson 1932]
UKHL 100
[1932] AC 562, considered Dovura Pty Ltd v Wilkins [2000] FCA 1902, distinguished East River Steamship
Corp v Transamerica Delaval Inc [1986] USSC 130
(1986) 476 US
858, considered Esanda Finance Corporation Ltd v Peat
Marwick Fancourt v Mercantile Credits Ltd [1983]
HCA 25
(1983) 154 CLR 87, distinguished Hawkins v
Clayton (1988) 164 CLR 535, distinguished Hedley Byrne & Co Ltd v
Heller & Partners Ltd [1963] UKHL 4
[1964] AC
465, considered Henderson v Merritt Syndicates [1994] UKHL 5
[1995] 2 AC 145, citedHungerfords [1997]
HCA 8
(1997) 188 CLR 241, cited Junior Books Ltd v Veitchi Co
Ltd [1982] UKHL 4
[1983] 1 AC
520, considered Le Lievre v Gould [1893] 1 QB 491,
considered Lumley v Gye [1953] EngR 15
(1853) 118 ER 749, considered Minchillo v Ford Motor Co of Australia
[1995] VicRp 78
[1995] 2 VR 594, distinguished Norman Nominees Pty Ltd (in liq) & Ors
v Zervos Pty Ltd & Ors [2011] QSC 320,
consideredQantas Airways Ltd v Aravco Ltd [1996]
HCA 12
(1996) 185 CLR 43, citedRivtow Marine Ltd v Washington
Ironworks (1973) 40 DLR (3d) 530, distinguished Robinson v PE
Jones (Contractors) Ltd [2011] EWCA
Civ 9
[2012] QB 44, considered Rylands v Fletcher [1968]
UKHL 1
(1868) LR 3 HL 330, considered Spencer v The
Commonwealth [2010]
HCA 28
(2010) 241 CLR 118, cited Theseus Exploration Pty Ltd v
Foyster [1972]
HCA 41
(1972) 126 CLR 507, followed Ultramares Corp v
Touche (1931) 255 NY 170, cited Voli v Inglewood Shire Council [1963]
HCA 15
(1963) 110 CLR 74, considered Webster v Lampard
[1993]
HCA 57
(1993) 177 CLR 598, distinguished Weldon v Neal
(1887) 19 QBD 394, followed
Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004]
HCA16
[2004] HCA 16
(2004) 216 CLR 515, considered
Judgment (264 paragraphs)
[1]
TORTS - NEGLIGENCE - ESSENTIALS OF ACTIONS NEGLIGENCE - DUTY OF CARE -WHERE PURE ECONOMIC OR FINANCIAL LOSS - Where plaintiff purchased a boat from a boat dealer who had purchased the boat from the manufacturer -Where the plaintiff purchased the boat for commercial game fishing charter purpose - Where quality of the design and construction in contention - Where plaintiff claims damages for the tort of negligence for pure economic loss being loss of value or cost of repairs - Whether boat manufacturer owed duty of care to subsequent purchaser - Whether there is a general duty of care upon a manufacturer of chattel not to cause economic loss to subsequent purchasers of defective products
[2]
TRADE AND COMMERCE - COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION - CONSUMER PROTECTION - LIABILITY OF MANUFACTURERS OR IMPORTERS FOR DEFECTIVE GOODS - Where the plaintiff contended that a boat purchased was by supply to a consumer - Whether a crewed boat charter is a "supply" of goods - Whether sale of a boat intended for use as for game fishing charters is a supply "to a consumer"
[3]
PROCEDURE - SUPREME COURT PROCEDURE - QUEENSLAND - PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS - SUMMARY JUDGMENT - Where defendant claims no duty of care AGAINST PURE ECONOMIC LOSS IS OWED BY a boat manufacturer to a subsequent purchaser - Whether plaintiff has no real prospect of success opun the issue of a duty of care - Whether a summary judgment or a pleading based determination ought to be given
[4]
PROCEDURE - SUPREME COURT PROCEDURE - QUEENSLAND - PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS - AMENDMENT - Where plaintiff applies for leave to amend its statement of claim to plead additional causes of action - Where causes of action are barred by statutory limitation period - Whether causes of action are founded on the same facts or substantially same facts as the existing causes of action - Whether leave ought be given
GJ Nell SC and SC Derrington for the second defendant
[40]
**[1] JACKSON J: The parties in the present case are engaged in significant interlocutory and underlying disputes about a boat. The interlocutory disputes are about what should be the scope of the underlying dispute, fought through cross-applications to amend the statement of claim and for summary judgment against part of the plaintiff's claim. The underlying dispute concerns the quality of a $2.2M boat designed and built by a manufacturer, sold to a dealer for boats built by the manufacturer and later re-sold to the dealer's customer. The parties have a core dispute as to the quality of the construction and design of the boat
[41]
[2] The plaintiff ("Tarangau") is a corporate vehicle which its director Mr Wong caused to buy a 57 foot fly-bridge motor boat from the first defendant ("Eagle Yachts"). The boat was designed and built by the second defendant ("Bertram"), a boat builder in the class of large high-speed boats of this kind. From a time in late 2004 or early 2005, Eagle Yachts became sole dealer in Australia for Bertram boats. Bertram boats are built in Florida in the United States of America where Bertram carries on business. Bertram built the boat in 2004. Eagle Yachts bought the boat from Bertram in November 2004. From then it was described as a stock boat in warranty invoices issued by Bertram to Eagle Yachts. Mr Wong saw the boat at a boat show in Sanctuary Cove in May 2006. Tarangau bought the boat from Eagle Yachts in July 2006.
[42]
[3] Tarangau's name suggests that Mr Wong had it in mind to use the boat for game fishing charters. The use of the boat in that way in Queensland requires that it be in survey. Tarangau set about that task. The boat was inspected by a qualified surveyor. Alleged problems as to its condition emerged from that process.
[43]
[4] Tarangau arranged for reports to be prepared as to the boat's condition by a qualified person. It engaged lawyers. By late 2008, Tarangau's lawyers had engaged with Bertram and Eagle Yachts as to the condition of the boat. Bertram inspected it in March 2009. Copies of reports were exchanged. Some negotiations ensued as to repairs that might be effected. Bertram made offers. They were not good enough for Tarangau. It says the boat has only salvage value, such is the extent of the defects. Bertram disputes that.
[44]
[5] Tarangau started this proceeding in 2010. Progress of the proceeding to date has been slow. Bertram has challenged whether Tarangau has a viable cause of action against it for damages for negligence, on the ground that Bertram, as manufacturer, owed no duty of care to Tarangau as to the quality of the boat. Tarangau has responded by attempting to shore up the allegation of a duty of care in negligence, by re-pleading part of that cause of action, and by seeking to add further causes of action to support a claim for damages based on the alleged defective condition of the boat under statutory obligations alleged to be owed by Bertram under the Trade Practices Act 1974 (Cth) ("TPA") and for damages for breach of a contract of express warranty.
[45]
[6] Tarangau thus applies for leave to amend the claim and the statement of claim ("the amendment application"). Leave is required to amend the claim as a matter of generality under UCPR 375 and 377. Leave is not generally required to amend the statement of claim: UCPR 378. But Tarangau seeks to add claims for damages and causes of action under s 74B, s 74D and s 74G of the TPA which are provisions of Div 2A of Pt V of the TPA. Accordingly, s 74J of the TPA requires an action under each of those provisions to be commenced within three years after the date on which the cause of action accrued. It is common ground that the relevant date from which the three year period commenced for the purposes of Tarangau's application in respect of the additional causes of action under s 74B and s 74D was 19 December 2008. Bertram does not contend that the cause of action under s 74G is out of time.
[46]
[7] Pursuant to s 16 of the Civil Proceedings Act 2011 (Qld) and UCPR 375 the court may allow a party to amend the claim at any stage of the proceeding and may give leave to make an amendment even if the effect of the amendment would be to include a cause of action arising after the proceeding was started. By UCPR 375(4) that rule is made subject to UCPR 376. By UCPR 376(4) the court may give leave to make an amendment to include a new cause of action only if the court considers it appropriate and the new cause of action arises out of the same facts or substantially the same facts as a cause of action for which relief has already been claimed in the proceeding by the party applying for leave to make the amendment.
[47]
[8] Bertram opposes the grant of leave on the ground that the new causes of action under s 74D and s 74G do not arise out of the same or substantially the same facts as the causes of action for which relief is already claimed. It makes the same contention about the cause of action Tarangau seeks to add for damages for breach of contract, which is mounted in reliance upon the express manufacturer's warranty given by Bertram to first buyers of its boats who complete and return the warranty registration form. It is common ground that Tarangau completed and returned the form.
[48]
[9] Bertram also contends that leave should not be granted because the proposed additional claims under s 74B, s 74D and s 74G of the TPA would be futile, because the boat was acquired by Tarangau "for the purposes of supply or re-supply including by way of lease or hire", or because Bertram was not carrying on business in Australia at the time it manufactured the vessel. Bertram contends that either point repels the application of the TPA.
[49]
[10] Lastly, Bertram contends that leave should not be granted on discretionary grounds, because "no explanation has been provided by the plaintiff ... as to why (the additional causes of action) were not previously pleaded, in particular, before they became time barred" and contends that "these new causes of action ... will require of the second defendant investigation into matters of fact and questions of law which are different from those that are already been raised and addressed, which no fair warning has been given by the plaintiff".
[50]
[11] Bertram further cross-applies under UCPR 293 for summary judgment on Tarangau's claim against it for damages for negligence. The ground is that Tarangau has no real prospect of succeeding on that claim because it has no real prospect of success of establishing that Bertram owed the duty of care alleged in the present further amended statement of claim ("FASOC").
[51]
[12] Tarangau described the boat as a "vessel" in the original statement of claim. It now describes it as a "yacht" in the FASOC, perhaps having regard to Bertram's name and to the terms of the express warranty. It has referred to the operation of the boat on water as "sailing", even though it is a high-speed motor boat. For clarity, and notwithstanding that it is possible to employ "yacht" or "sailing" in connection with a powered vessel, in these reasons I have preferred the terms "boat" and "operating", except where I have quoted directly from a relevant part of the pleading.
[52]
[13] Paragraph 26 of the FASOC pleads centrally that "the yacht was not fit for the purpose of sailing and fishing in the open sea and was not of merchantable quality...", which corresponds to the allegations previously made in subparas 17(a) and (b) of the prior amended statement of claim ("ASOC") that "the vessel is... not reasonably fit for use as an open waters vessel or at all" and "the vessel is not of merchantable quality".
[53]
[14] However, the allegations of unfitness for purpose and un-merchantable quality in the ASOC were confined to alleged breaches of s 19 of the Sale of Goods Act 1923 (NSW). Six separate causes of actions pleaded in the FASOC now turn on the current allegations of unfitness and un-merchantability, including as against Bertram that there were breaches of the manufacturer's statutory obligations as to fitness under s 74B of the TPA and as to merchantability under s 74D of the TPA.
[54]
[15] Bertram's written submission contends that s 74B and s 74D of the TPA did not engage upon Bertram as a manufacturer of boats in the United States of America which was not alleged to carry on business in Australia. However, at the hearing of the application, Bertram abandoned that point, so it is unnecessary either to consider whether it is correct or whether the facts alleged in the FASOC engage the extra-territorial operation of the TPA under s 6, in any event.
[55]
[16] The application of either s 74B or s 74D of the TPA requires, inter alia, that a person[1] "supplies" the goods "to a consumer".[2]
[56]
[17] In addition, paragraph 49 of the FASOC alleges that Bertram is liable to compensate Tarangau for failure to comply with the express warranty given or made by Bertram in relation to the boat, under s 74G of the TPA.
[57]
[18] The application of s 74G also requires, inter alia, that a person "supplies" the goods "to a consumer": s 74G(1)(b).
[58]
[19] Section 4B(1)(a) of the TPA provides that a person[3] shall be taken to have acquired particular goods as a consumer "if, and only if", inter alia, "the person did not acquire the goods, or hold himself or herself out as acquiring the goods, for the purpose of re-supply...".
[59]
[20] The verb "supply" is defined in s 4 of the TPA to include "in relation to goods - supply by way of sale, exchange, lease, hire or hire purchase...". Bertram contended that the acquisition of the boat by Tarangau was for the purpose of using the boat for game fishing charters or that Tarangau held itself out as acquiring the boat for that purpose.
[60]
[21] Bertram therefore contended that either the acquisition of the boat by Tarangau was for the purpose of re-supply or Tarangau held itself out as acquiring the boat for the purpose of re-supply. Bertram submitted that it was not reasonably arguable that Tarangau acquired the boat as a consumer. It submitted that it would follow that it was not reasonably arguable that under s 74B and s 74D, Eagle Yachts supplied the boat to Tarangau as a consumer.
[61]
[22] Paragraph 21(a) of the FASOC alleges that prior to entering into the contract Tarangau expressly or impliedly made known to Eagle Yachts that Tarangau "proposed... to put the yacht into, commercial survey whereby the yacht could be chartered for commercial game fishing". Consistently with that, para 35(a) alleges that Tarangau spent $381,626.65 in changing the yacht to meet the requirements for achieving commercial survey, "whereby the yacht could be chartered for commercial game fishing". So there does not appear to be any serious dispute, on the basis of the present pleading, that Tarangau acquired the vessel for the purpose of chartering for commercial game fishing, or that it held itself out as acquiring the boat for that purpose. That position is consistent with the earlier iterations of the pleading.
[62]
[23] However, Tarangau contended that the charters it intended to engage in and held out that it had as a purpose for acquiring the boat, were not "hire" within the meaning of the definition of "supply" because any charter would have been one of the boat with a skipper and crew for a fishing expedition. The skipper and crew would maintain control of the boat, in contrast to what is sometimes described as a bare boat charter. Tarangau would remain in possession of the boat during the charter.
[63]
[24] Tarangau submitted that in the definition of "supply", each of the other identified classes of supply - sale, exchange, lease and hire-purchase - involves a transfer of possession to the acquirer, whereas a charter of the kind it proposed would not involve a transfer of possession. If an analogy were to be drawn, a charter of the kind proposed by Tarangau might be likened to the hire of a taxi-cab, or the charter of an aircraft, and Tarangau submits that is not enough to constitute a "re-supply" so as to exclude the acquisition of the boat from constituting a supply "to a consumer" within the meaning of s 74B, s 74D or s 74G as affected by s 4B and the definition of "supply" in s 4.
[64]
[25] A contrary view is that the identified classes of supply of goods are intended to operate widely, and that there is no reason to exclude from the scope of what is a "hire" a common form of transaction where the goods are controlled by and in the legal possession of the owner during use under a contract of charter or hire. My initial impression was that there was no identifiable context or purpose in the TPA which would distinguish between a charter which was a hire and one which was not based on whether the charterer had possession.
[65]
[26] A possible exception to that, however, is the express inclusion in an acquisition as a consumer within the meaning s 4B(1)(a) of an acquisition of goods where the goods consisted of a "commercial road vehicle". One would ordinarily expect a vehicle or trailer acquired for use principally in the transport of goods on public roads to be operated by the acquirer under contracts of carriage, which it might be argued would be within a class of "hire", taking "hire" as having the ordinary meaning of "the action of hiring or fact of being hired; engagement or agreed terms of payment for use, service, etc".[4] It would tend to negative the express inclusion of a commercial road vehicle in the classes of acquisitions by a consumer if the operation of those vehicles in the ordinary way were excepted from the operation of s 4B(1)(a) as a "re-supply" by way of "hire".
[66]
[27] Neither of the parties relied on any case law as to the proper approach to the interpretation of the TPA as consumer legislation or as legislation having a beneficial purpose. See, for example, Qantas Airways Ltd v Aravco Ltd,[5] as to the approach to the construction of the provisions of Pt V of the TPA. However, the interpretation of the operation of s 4B(1)(a) and the meaning of the definition of "supply" are not necessarily easily resolved by such an approach. To give a wide meaning to "supply" has the possible effect of extending the reach of the inclusionary language in the definition but, at the same time, in s 4B(1)(a) would extend the exclusionary operation of acquisitions for re-supply or held out as for the purpose of re-supply in respect of acquisitions of goods.
[67]
[28] Although there are some cases where it is appropriate to express a concluded view on a question of construction of a statute in determining whether or not it would be futile to grant leave to amend so as to raise a cause of action depending on the statute, I do not consider it appropriate in this case. Any decision in favour of Tarangau will not create an issue estoppel as to the proper construction of "supplies to a consumer". It seems to me that the application of s 74B, s 74D or s 74G in the present case as a supply to a consumer is reasonably arguable and that is enough to answer Bertram's contention that the amendments to raise the causes of action based on those sections should not be allowed because they would be futile. It is not appropriate to go further in the analysis of the competing arguments in these circumstances, unless I were of the view that it is so clear that Bertram must succeed on this question that I should resolve it in Bertram's favour at this summary stage. I am not of that view.
[68]
"Arises out of the same facts or substantially the same facts"
[69]
[29] As previously summarised, Tarangau adds or seeks to add four new causes of action against Bertram in the FASOC. Three of them are based on s 74B, s 74D and s 74G of the TPA respectively. The fourth cause of action is the claim for damages for breach of contract based on the express warranty as to quality given by Bertram to Tarangau as first purchaser from a dealer.
[70]
[30] Also as previously mentioned, Bertram contends that the causes of action based on s 74B and s 74D (but not the cause of action based on s 74G) are brought in contravention of s 74J of the TPA because the proceeding for those causes of action was not commenced within three years of the day on which the cause of action accrued.[6] Tarangau does not dispute that contention, but applies for leave to amend to add those causes of action under UCPR 375 and 376(4).
[71]
[31] Bertram contends that the cause of action for damages for breach of contract based on the express warranty as to quality also requires leave UCPR 375 and 376(4) because the relevant contractual clause, headed "Limited Warranty", provides, in part: "However, legal claims relating to any alleged problems with this yacht shall be barred unless suit is commenced within 6 months from the date the cause of action accrues, regardless of the time remaining in the applicable warranty period".
[72]
[32] Bertram submits that the period under that clause expired, at the latest, on 21 January 2011. It is unnecessary to consider whether that is so. In my view, UCPR 376(4) does not apply to it.
[73]
[33] UCPR 376 applies if "a relevant period of limitation... has ended". The Dictionary in Schedule 4 to the UCPR defines "limitation period" to mean a "limitation period under the Limitations of Action Act 1974". In Norman Nominees Pty Ltd (in liq) & ors v Zervos Pty Ltd & ors[7] Dalton J construed "period of limitation" in UCPR 376(4) to include a period prescribed under a Commonwealth Act. However, nothing suggests to me that a contractually agreed period after which a legal claim is agreed to be "barred" also falls within the meaning of "a relevant period of limitation" in UCPR 376.
[74]
[34] The mischief or reason for statutory provisions which permit the addition to an existing proceeding of a cause of action, which would be subject to a limitation defence under statute if a new proceeding were started, stems from the rule that, generally speaking, the limitation period under statute stops running at the date when a proceeding is commenced, not when an amendment to add a cause of action is made.[8] That led to the rule of practice in Weldon v Neal[9] that it was ordinarily not permissible to add a cause of action for which the limitation period had expired under generally expressed rules of court providing for amendment. Rules of court which expressly permitted such an amendment to be made, in some circumstances, followed.[10] None of those developments concerned a contractually agreed time bar against making a legal claim.
[75]
[35] Of course, without a power to extend the time period under UCPR 376(4), or some other power to extend time, a contractually agreed bar potentially operates under Australian common law as a defence to a claim for damages for breach of contract. Bertram did not submit that it would lose the benefit of the time bar under the Limited Warranty if an amendment were now made to permit the cause of action to be raised, or that the application of the time bar was so clear that an amendment in relation to this cause of action should not be permitted as futile, or struck out as an abuse of process. It is unnecessary, therefore, to further consider whether the proper law of any contract in terms of the warranty is the law of Florida, as the Limited Warranty selects, or whether that has any impact on the parties' rights.
[76]
[36] The parties accepted that UCPR 376(4) applied to the causes of action based on s 74B and s 74D of the TPA.[11] Specifically, neither party contended that UCPR 376(4) did not apply under s 16 of the Civil Proceedings Act 2011 (Qld) to those causes of action. The questions under the sub-rule are whether the court considers that leave to make the amendment sought is "appropriate" and whether the relevant new cause of action "arises out of the same facts or substantially the same facts as a cause of action for which relief has already been claimed in the proceeding...".
[77]
[37] Initially, Bertram contended that the only facts which could be considered for that purpose were those alleged in the "plaintiff's existing claim against the defendant which it seeks to subject to the new claims". However, during oral argument, Bertram abandoned that contention and accepted, instead, that the application should be resolved on the footing that any fact pleaded in the statement of claim against either defendant was relevant. In oral argument, Bertram also appeared to mount its submissions on the basis that consideration could be given to facts pleaded at the time of the amendments under the ASOC or the FASOC.
[78]
[38] Paragraph 20 of the FASOC alleges that the boat "was of a kind ordinarily acquired for personal use" and that Tarangau "acquired the yacht as a 'consumer' within the meaning of the TPA". Those allegations go to the requirement of a supply to a consumer in each of s 74B and s 74D, and the requirements of s 4B of the TPA in that respect. In its written submissions, Bertram identified the fact that the supply of the boat to Tarangau was "to a consumer" as a particular fact out of which the causes of action under s 74B and s 74D arose which was not substantially the same as an existing cause of action.
[79]
[39] However, the original statement of claim alleged that the boat was a "57.12 foot Bertram 570 Flybridge Cruiser"; that the boat was "transferred from the Second defendant to the First Defendant for the purposes of re-sale"; that Tarangau "entered into an agreement with the First Defendant for the purchase of the" boat; that the sale of the boat to Tarangau by Eagle Yachts was a sale of goods by description as a "Bertram 570 Flybridge Cruiser"; and that Tarangau "made it known to the First Defendant that the particular purpose for which the Vessel was required" was, in part, to operate the boat "as a fishing boat to be used in open waters". Having regard to the definition of "supply" and s 4B of the TPA, as previously discussed, it is difficult to comprehend what factual allegation about the requirement that a person (in this case Eagle Yachts) supplies the goods to a consumer under the relevant sections was not already pleaded in the statement of claim.
[80]
[40] In oral argument, I asked Bertram's counsel to identify any other facts out of which the causes of action under s 74B and s 74D arose which were not substantially the same facts as those for an existing cause of action.
[81]
[41] They relied on the allegation in para 23(a) of the FASOC which alleges that Tarangau's "purpose in acquiring the yacht (pleaded in paragraph 21(a)) above was made known to the second defendant expressly by being communicated by Mr Wong to the First Defendant (as pleaded in paragraph 21(a) above)". Paragraph 21(a), to which the cross reference is made, alleges that "[p]rior to entering into the contract the Plaintiff expressly... made it known to the First Defendant... that the Plaintiff proposed to use the yacht for sailing and fishing in the open sea off the coast of Australia". They are factual allegations from which the cause of action under s 74B of the TPA arose, in part.
[82]
[42] Paragraph 10 of the original statement of claim alleged that "in or about May 2006 the Plaintiff expressly made it known to the First Defendant the particular purpose for which the Vessel was required, namely to be operated by the Plaintiff as a commercial game fishing boat for charter". The ASOC added that the purpose was also "as a fishing boat to be used in open waters". Both the original statement of claim and the ASOC particularised those allegations as occurring in "Face to face discussions that took place between Mr Wong and Mr Rodgers at the boat show at Sanctuary Cove, Queensland, in or about May 2006...". Those particulars are still provided under paragraph 21.
[83]
[43] Again, it is difficult to comprehend what factual allegation about the cause of action based on s 74B of the TPA did not appear in the original statement of claim. Except for the allegation in para 23(a) that the purpose was made known to Bertram through the First Defendant, the variation is minor. As to that, the original statement of claim and the ASOC alleged in paragraph 1(c)(iii) that Eagle Yachts "acted as the exclusive agent in Australia for the sale and distribution of vessels manufactured by the Second Defendant".
[84]
[44] Bertram also made reference to the allegation in the FASOC that the boat was not fit for the relevant purpose or of merchantable quality at the time of sale - viz paras 26 and 39. The point being made was that there was a delay between the sale by Bertram to Eagle Yachts in 2004 and the subsequent sale by Eagle Yachts to Tarangau in July 2006. However, it is not clear where that point is intended to lead.
[85]
[45] According to para 7(a) of the FASOC, the boat was "delivered" by Bertram to Eagle Yachts in or about November 2004. The original statement of claim alleged in para 3 that it was "transferred" from Bertram to Eagle Yachts in that month.
[86]
[46] As previously mentioned, para 26 of the FASOC alleges that "at the time of sale to the Plaintiff the yacht was not reasonably fit for the purpose of sailing and fishing in the open sea and was not of merchantable quality". Paragraph 17 of the original statement of claim alleged that there was a breach of the implied term as to fitness for purpose as a commercial game fishing boat and that the boat was "not reasonably fit for use as an open waters vessel or at all" and that there was a breach of the implied term as to merchantable quality because of the condition the boat was then in, without specifying a time of breach. However, it seems to me that there could have been little doubt that the relevant time of any breach of terms implied under the Sale of Goods legislation must have been when the vessel was sold to Tarangau.
[87]
[47] Lastly, looking at the question more broadly, Bertram relied on the amendments made to the allegations as to unfitness and un-merchantability in para 26 of the FASOC as facts out of which the new causes of action under s 74B and s 74D of the TPA arose. They are to be compared with para 17 of the original statement of claim, and the particulars under that paragraph, which supported the causes of action originally pleaded. However, Bertram did not identify specific facts to demonstrate where any substantial difference might lie.
[88]
[48] In my opinion, none of the points relied upon by Bertram leads to the conclusion that either of the new causes of action under s 74B and s 74D did not arise out of substantially the same facts as a cause of action for which relief has already been claimed in the proceeding. On the contrary, in my view, the opposite conclusion is preferable and I so find.
[89]
[49] Equally, in my view, it is "appropriate" within the meaning of UCPR 476(4) that leave be given to make the amendments in respect of s 74B and s 74D. Bertram submitted generally that it was disadvantaged because the amendments will "require of the Second Defendant investigation into matters of fact and questions of law which are different from those that have already been raised and addressed, of which no fair warning has been given by the Plaintiff and which will involve the Second Defendant in further time, costs and delay to the determination of a potential claim the liability for which the Second Defendant denies".
[90]
[50] Such a strongly expressed submission calls for some discussion. Bertram did not identify any particular questions of law under s 74B or s 74D which, given the current progress of the proceeding, called up that part of the submission about matters requiring investigation. In my view, there is nothing about any question of law raised under s 74B or s 74D which is of particular importance in the context of this significant commercial or consumer dispute. It is not apparent to me what fair warning ought to have been given but was not given to Bertram about any such question.
[91]
[51] Perhaps even more surprising, given the terms of the submission, is that Bertram tendered no evidence to suggest what different matters of fact require investigation, or that it has any difficulty in making any investigation which might be required. Instead, it relied on an affidavit of a solicitor who swore that "the plaintiff has prepared its case solely on the basis of the case which has been made against it in negligence pleaded in the statement of claim". Precisely what that is intended to convey as to the impact of the new causes of action under s 74B and s 74D is not elucidated.
[92]
[52] What is clear, however, is that Bertram has had ample opportunity to investigate and indeed has investigated the alleged defects in the boat. As stated above Tarangau purchased the boat from Eagle Yachts in July 2006. Following the purchase:**
[93]
(a) between 9 February 2007 and 18 February 2008 Tarangau submitted the boat for repairs pursuant to the warranty and Bertram has records of those repairs;
[94]
(b) by letter dated 20 October 2008, Navsafe Marine Pty Ltd informed Tarangau of alleged structural defects identified during inspections of the boat on 15 and 17 October 2008;
[95]
(c) by letter dated 11 November 2008, Tarangau's lawyers informed Eagle Yachts of the alleged defective condition of the hull;
[96]
(d) by letter dated 11 November 2008, Tarangau's lawyers invited Bertram to inspect the boat and enclosed a copy of the letter of that date to Eagle Yachts;
[97]
(e) by email dated 13 January 2009, Tarangau's lawyers dated sent a copy of an inspection and condition report about the boat by Nekton International dated December 2008 to Bertram (a copy of which was tendered on the hearing of Tarangau's application);
[98]
(f) on 5 March 2009, two Bertram employees inspected the boat and produced a report (a copy of which was exhibited to an affidavit relied on by Bertram at the hearing of the application);
[99]
(g) by email dated 15 July 2009, Tarangau's lawyers provided a further report by Nekton International to Bertram; and
[100]
(h) by email dated 31 July 2009, Bertram's lawyers declined an invitation to make a further survey of the boat.
[101]
**[53] In the light of the detailed investigations and exchange of reports by the parties, including Bertram's in-house experts, from early 2009, it seems unsatisfactory, to say the least, for Bertram to make a submission as to the requirement of investigations into further matters of fact as warranting a general discretionary refusal of the requested amendments without in any way articulating what the matters might be and whether they present any real possibility of an obstacle to the case being fairly made ready for trial at an early date.
[102]
[54] Accordingly, I reject the submission made that leave to amend is not appropriate because Bertram must investigate questions of fact or law which are different from those that have already been raised and addressed.
[103]
[55] Bertram's cross-application for summary judgment is based on the contention that "there is in Australian law no general duty of care upon a manufacturer of a chattel not to cause economic loss to subsequent purchasers for a defective product". Of course, the existence of a duty of care is a necessary element of Tarangau's alleged cause of action against Bertram for damages for the tort of negligence.
[104]
[56] Both parties proceeded on the assumption that the common law of Australia was the substantive law to be applied in determining the existence of a duty of care. I too will proceed on that basis, even though the allegations of negligent acts or omissions in the design or construction of the boat are of acts or omissions which occurred in Florida which can raise questions as to the proper law to be applied,[12] and one of the terms of Bertram's warranty provided that "to the extent permitted by law... Florida law... shall apply". There was no evidence led as to Florida law. Even so, the discussion of a duty of care in a context like this conveys the unwary traveller into difficult territory.
[105]
[57] Tarangau submitted that it was inappropriate to resolve the question of whether a duty of care existed. On a defendant's application for summary judgment the question is whether there is a real prospect that the platintiff's claim will succeed, meaning in this context a real question whether Bertram owed Tarangau the alleged duty of care. If that point is reached, in the circumstances of this application, nothing more remains to be decided. The proceeding on an application of this kind is not equivalent to a demurrer or a question of law upon a case stated, or the determination of whether there is a reasonable cause of action upon an application to strike out a statement of claim. Tarangau submitted that "summary judgment should only be sought in a clear case" and "the present is far from that".
[106]
[58] Beyond that, however, there are statements in cases of high authority which also warn against a summary or pleading based determination of the question of the existence of a duty of care. For example, as to a pleading based challenge, Gummow J said in Esanda Finance Corporation Ltd v Peat Marwick Hungerfords:
[107]
"It was accepted that this procedure should be reserved for a plain case, in accordance with the principles identified in General Steel Industries Inc v Commissioner for Railways (NSW)."[13]
[108]
[59] In Woolcock Street Investments Pty Ltd v CDG Pty Ltd[14] the procedural context of the challenge to the existence of a duty of care was a case stated upon agreed facts. Those facts were described in the reasons of the plurality as "add[ing] little to the exiguous allegations of fact made in the pleadings". The reasons later continued[15]:
[109]
"[t]he dangers of developing common law principle against an artificially constricted body of fact are self-evident. That is why, in some cases, even if the parties join in asking a court to determine a question separate from trial of the facts, it may be prudent for the court to decline to answer the question as being one appropriate to answer..."
[110]
[60] The point which seems to be at the root of these directive statements is that in a new case or category of case the pleadings or other interlocutory process may not identify the facts well enough or finally enough to answer the question appropriately. It may logically be contended that those statements should be borne in mind where the question of the existence of a duty of care is presented for decision on a summary judgment application.
[111]
[61] Against that, it must be remembered that a defendant has the right to bring an application for summary judgment which engages the Court's duty to answer the question whether the plaintiff has a real prospect of success on the claim in the proceeding. That much is not a matter of discretion. Secondly, it must also be remembered that in deciding the application the Court is required to act in accordance with the directions contained in UCPR 5 as to efficiency, savings of costs and avoiding delay. Thirdly, there is a long history of case law which has decided the question of the existence of a duty of care as a question of law based on pleaded facts - even Donoghue v Stevenson was such a case. In earlier procedural regimes, the decision may have been made upon a proceeding by demurrer or case stated or by way of determination of a separate question, as well as an application to strike out a pleading as not disclosing a reasonable cause of action. Recent rules, such as UCPR 293, permit the question to be raised on an application for summary judgment brought by a defendant.
[112]
[62] It may occur that a plaintiff fails to plead sufficient facts to disclose a reasonable cause of action in negligence because the pleaded facts do not raise a duty of care in law. Where a case is based on a novel allegation of a duty of care, there can be no doubt that the facts which give rise to the duty are material facts in a pleading sense. They must therefore be pleaded. An appellate court's dissatisfaction with the fullness of the pleaded facts in a particular case as a basis for deciding whether a duty of care is owed in law will not alter the requirements which face a plaintiff against whom an application for summary judgment is made.
[113]
[63] Where a difficult question is one of law, not one of ascertaining the relevant factual basis for the legal question, some of the decided summary judgment cases (admittedly originating from before the time when the "real prospect of success" requirement was introduced) recognise that the Court may properly decline to enter upon the question.[16]
[114]
[64] This must be so where applications for summary judgment are brought in the applications list in a context where usually they are expected to be heard within a couple of hours. The argument in the present case was presented in that way.
[115]
[65] As well, it was recently said by French CJ and Gummow J in Spencer v The Commonwealth, in the context of summary judgment based on a rule which provided for judgment where there was "no reasonable prospect of success", that
[116]
"the exercise of the powers to summarily terminate proceedings must always be exercised with great caution. That is so whether such disposition is sought on the basis that the pleadings fail to disclose a reasonable cause of action or on the basis that the action is frivolous or vexatious or an abuse of process. The same applies where such a disposition is sought in a summary judgment application supported by evidence."[17]
[117]
[66] However, the plurality reasons in Spencer, while agreeing in the result, disagreed that there was equivalence between the approach to be taken under earlier procedural mechanisms, such as a defendant's application to strike out a pleading as not disclosing a reasonable cause of action or for "summary judgment" on the grounds that the action is frivolous, vexatious or an abuse of process and the proper approach under a power to give judgment if the other party "has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding".[18] The plurality approach has been considered and was possibly distinguished in Queensland in Coldham-Fussell & ors v Commissioner of Taxation,[19] but nevertheless the relevant guidance under UCPR 293 remains to be found in the statutory language, not "the judicial creation of a lexicon intended to capture the operation" of that language.[20]
[118]
[67] For comparison, a recent case which considered a similar sort of question upon a summary judgment application in Western Australia is Alcoa of Australia Ltd v Apache Energy Ltd.[21] However, the questions raised in the present case must be looked at individually and in this court's procedural framework.
[119]
[68] At the risk of unhelpful length, but to identify the extent of the novelty of the duty of care alleged in this case to have been owed by Bertram, it is appropriate to identify some of the major features which appear on the topography. Further, Tarangau founded its argument for the existence of a duty of care on the reasons for judgment of Finkelstein J in Dovuro Pty Ltd v Wilkins[22] which trace through the history of some of the relevant cases. It is appropriate, therefore, to start with some of that legal history. However, what follows is not intended to be a comprehensive or exhaustive account.
[120]
[69] It is uncontroversial that, historically, the liability of a manufacturer of a chattel for the quality of the thing made was the province of the law of contract, so that a subsequent purchaser would look towards their vendor in contract, not the manufacturer. The tort of deceit operated independently of contract, but the liability of a manufacturer for negligence was limited and liability in negligence for purely economic loss was not recognised.
[121]
[70] At a general level, these propositions are based in 19th century case law which was fairly clear. As Gummow J put it succinctly, but speaking of physical damage, in Esanda:[23]
[122]
"Dean Prosser has pointed out that Winterbottom v Wright was taken both in England and the United States to mean that the manufacturer or first seller of goods was not liable for damage caused by their defect to any party other than the buyer or one in privity with that buyer. That view first was qualified in respect of goods dangerous in themselves... then it was overthrown in the United States as a result of MacPherson v Buick Motor Co and subsequently in England as a result of Donoghue v Stevenson..."
[123]
[71] When Cattle v Stockton Waterworks Co[24] was decided in 1875, and negated the existence of a duty of care in tort for negligently caused pure economic loss, the discussion of the existence of a cause of action proceeded by reference to Rylands v Fletcher[25] and Lumley v Gye,[26] neither of which was a case within the modern conception of the tort of negligence. It was concluded that there was no cause of action for negligently causing interference with the plaintiff's business. The dispositive reasons of the Divisional Court ring out as truly today as they did then:**
[124]
"In the present case the objection is technical and against the merits, and we should be glad to avoid giving it effect. But if we did so, we should establish an authority for saying that, in such a case as that of Fletcher v. Rylands the defendant would be liable, not only to an action by the owner of the drowned mine, and by such of his workmen as had their tools or clothes destroyed, but also to an action by every workman and person employed in the mine, who in consequence of its stoppage made less wages than he would otherwise have done. And many similar cases to which this would apply might be suggested. It may be said that it is just that all such persons should have compensation for such a loss, and that, if the law does not give them redress, it is imperfect. Perhaps it may be so. But, as was pointed out by Coleridge, J., in Lumley v. Gye, Courts of justice should not 'allow themselves, in the pursuit of perfectly complete remedies for all wrongful acts, to transgress the bounds, which our law, in a wise consciousness as I conceive of its limited powers, has imposed on itself, of redressing only the proximate and direct consequences of wrongful acts.' In this we quite agree. No authority in favour of the plaintiff's right to sue was cited, and, as far as our knowledge goes, there was none that could have been cited."[27]
[125]
**[72] In the language of more recent cases, the problem of "indeterminacy" is often important in deciding whether a duty of care against economic loss is owed by a defendant. And the category of case where the plaintiff's loss is economic loss consequent upon physical damage caused by the defendant to a third party is called "relational loss". But some of the considerations remain the same, even today, as those discussed in Cattle.
[126]
[73] Not 15 years after Cattle, the House of Lords decided Derry v Peek,[28] and the distinction was clearly drawn between damage caused by fraud and damage caused by negligence, in the context of a claim for purely economic loss suffered in reliance on negligent misstatement. It was confirmed that, without fraud, there was no cause of action. The practical result of Derry was that an 1890 statute was passed to cure the perceived deficiency which operated in the narrow sphere of liability to investors for statements made in a prospectus by a promoter.
[127]
[74] For present purposes, it is notable that Derry was an early case against liability for pure economic loss in addition to Cattle, as was Le Lievre v Gould,[29] where a certifier was held not to owe a duty of care in negligence to a principal under a construction contract who had suffered loss by paying sums to a builder against progress certificates made by the certifier, which had been negligently made.
[128]
[75] But all this was still 25 years before the tectonic shift in English and Scottish law as to the existence of a manufacturer's duty of care and liability in tort for negligence in cases of physical damage, brought about by Donoghue v Stevenson.[30] And, even after that, it was more than 40 years again before Hedley Byrne & Co Ltd v Heller & Partners Ltd[31] accepted, for the first time, liability for pure economic loss in the tort of negligence, thereby reversing the absoluteness of Derry, although it was said that Nocton v Lord Ashburton[32] adumbrated the decision in Hedley Byrne.
[129]
[76] Up to Donoghue, the focus of the English cases was undoubtedly upon physical damage, as opposed to purely economic loss. But, in a number of them, the target was a manufacturer of or service provider in respect of an article which caused physical damage. Some examples may assist.
[130]
[77] It is not necessary to look before Winterbottom v Wright[33], where the existence of a duty of care was denied to an injured coach driver for the defective condition of the coach due to the negligence of the contractor employed to maintain the coach for the driver's employer. Longmeid v Holliday[34] affirmed that no duty of care was owed by a manufacturer of a lamp to a user. Both these cases were decided by reference to the absence of a duty of care to a third party as to the quality of the thing supplied. The existence of a contract between the defendant and the acquirer of the article or services, who was not the plaintiff, was a basis for negating a duty of care in law, not the opposite conclusion.
[131]
[78] Blacker v Lake & Elliott[35] confirmed the abstract proposition that lack of skill and care in the manufacture of an article did not confer a cause of action to a person injured by reason of the article proving defective, although there was a line of cases which showed that there was an exception in the case of dangerous articles.
[132]
[79] Earl v Lubbock[36] reaffirmed Winterbottom v Wright. And, surprisingly, Bates v Batey & Co Ltd[37] held that there was no duty of care owed by the manufacturer of an exploding bottle to a user.
[133]
[80] But there were contrary developments in the United States, even prior to Donoghue v Stevenson. If truth be told, the landmark Scottish and English cases of Donoghue and Hedley Byrne did not first construct the edifice of the modern law of the tort of negligence. Nor, for all the eloquence Lord Atkin's reasoning in Donoghue v Stevenson, was the Brisbane-born law lord the chief architect of that development. Those honours belong to the New York Court of Appeals and to Chief Judge Cardozo respectively, both in the case of the liability of a manufacturer in tort for physical damage caused by negligence in the manufacture of the article and the liability of a person in tort for economic loss caused by a negligent misstatement made to a person who relies on the statement to their detriment
[134]
[81] The New York Court of Appeals' development of the law of negligence may be seen through a handful of cases. One of them, MacPherson v Buick Motor Co[38] was referred to in Donoghue v Stevenson, and relied upon by Lord Atkin. It decided that a duty of care is owed by the manufacturer of a motor car to the driver and passengers against the risk of physical damage.
[135]
[82] Another, Glanzer v Shepherd[39] decided that a public weigher owed a duty of care to both the purchaser and vendor of produce which they had agreed would be paid for by weight. This was a duty of care against pure economic loss. As may be expected, Glanzer was referred to in Hedley Byrne, where the exclusionary rule established by Cattle and Derry was made subject to an exception.
[136]
[83] Glanzer is also of interest because the duty of care was seen to stem from the "near privity" of the purchaser and the weigher. As Cardozo CJ later explained it in Ultramares Corp v Touche[40]:
[137]
"The bond was so close as to approach that of privity, if not completely one with it. Not so in the case at hand. No one would be likely to urge that there was a contractual relation, or even one approaching it, at the root of any duty that was owing from the defendants now before us to the indeterminate class of persons who, presently or in the future, might deal with the Stern company in reliance on the audit. In a word, the service rendered by the defendant in Glanzer v. Shepard was primarily for the information of a third person, in effect, if not in name, a party to the contract, and only incidentally for that of the formal promisee."
[138]
[84] The analysis of Gummow J in Esanda[41] considered the United States "near privity" rule as well as the similar analysis of relationships "equivalent to contract" by Lord Devlin in Hedley Byrne.[42] And, most recently, this concept was deployed in the analysis of Kiefel J in Barclay v Penberthy.[43]
[139]
[85] During the developments of Donoghue v Stevenson and Hedley Byrne, we in Australia were bound in precedent to the House of Lords and Privy Council. Donoghue v Stevenson was reflected in Grant v Australian Knitting Mills.[44] Hedley Byrne's development was expressed in relation to a duty of care for economic loss for negligent misstatement in Mutual Life & Citizens Assurance Co Ltd v Evatt[45]. So things stood when the High Court of Australia struck out on its own course in Caltex Oil (Aust) Pty Ltd v The Dredge Willemstad.[46]
[140]
[86] Caltex Oil is a remarkable case because it recognised a duty of care for pure economic loss for what is now called relational loss. Caltex was a user of the pipeline which the dredge damaged. The loss it recovered comprised additional costs of transporting its oil to the refinery incurred because it was unable to use the pipeline.
[141]
[87] The primary relevance of this historical discussion lies in the circumstance that the question as to the existence of a duty of care owed by a manufacturer to avoid negligence which causes economic loss being a loss of value or cost of repair of the manufactured chattel was not raised in any of those cases. As Lord Thankerton described Scots and English law in 1932 in Donoghue v Stevenson, keeping in mind that case was about physical damage:
[142]
"...unless the consumer can establish a special relationship with the manufacturer, it is clear, in my opinion, that neither the Law of Scotland nor the Law of England will hold that the manufacturer has any duty towards the consumer to exercise diligence. In such a case the remedy of the consumer, if any, will lie against the intervening party from whom he has procured the article".
[143]
[88] At that time, and since, as between the manufacturer and the purchaser of a chattel, the obligations as to quality of the thing itself, going to its value, were the exclusive province of the law of contract, as supplemented by statute. A claim for damages was invariably a claim for damages for breach of contract or a sum payable under statute.
[144]
[89] A consumer who suffers economic loss being a loss of value or cost of repair because of a defect in quality will in most cases have acquired the chattel under contract. The common law implied warranties as to fitness and merchantability of goods acquired under an agreement for sale which were made the subject of statute in Sale of Goods legislation from the latter part of the 19th century.
[145]
[90] More recently, in Australia, the Trade Practices Act 1974 (Cth) and its transmogrification, the Competition and Consumer Act 2010 (Cth), have stepped onto the field of battle about obligations of quality between a manufacturer and consumer. But these were and are claims for damages for breach of contract or damages or compensation payable under statute. They are not tort liability in negligence. The content of the particular obligations, the principles of remoteness of loss, the possible existence of defences such as contributory negligence all differ from tort liability.
[146]
[91] In the last century, it was recognised that there may be a concurrent duty of care in tort and an obligation to act with due skill and care under the terms of some contracts for the provision of skilled services. That was established for the common law of Australia by Hawkins v Clayton,[47] but there is no suggestion that those cases apply to a contract for the sale of goods, or a contract for work and materials supplied, so as to create an obligation as to the quality of the manufacture of the goods, whether or not the goods are made by the vendor.
[147]
[92] There are other areas where traditionally tort and contract have trodden different paths. A statement made by a vendor as to quality of an article (being an expensive motor boat) which is the subject of an agreement for sale within the meaning of the law of sale of goods might constitute an express contractual term as to quality, enforceable as either a condition or warranty by a claim for damages for breach of contract. Such a claim for damages is measured by the amount which will restore the plaintiff to the financial position as if the condition or warranty had been true. But the law of contract distinguishes between a statement of that kind intended to have contractual effect and one which is not promissory. A statement which is not promissory may constitute a misrepresentation. If made innocently, the vendor is not, per se, liable to the purchaser in damages at common law or in equity: JJ Savage & Sons Pty Ltd v Blakney. [48]
[148]
[93] There is scope for discordance between these rules of the common law and equity and the developing law of liability in negligence for negligent misstatement in the wake of Hedley Byrne. By casting the case as one where the representor negligently made the (innocent) representation, a plaintiff might escape the absence of any liability for damages for breach of contract. However, a fundamental difference remains. Damages for the tort of negligence are not awarded so as to put the plaintiff in the position as if the misrepresentation had been true. Instead, the liability is measured by an amount that would restore the plaintiff to the position as if the misrepresentation had not been made. Usually, that means the difference between the amount paid and its true value.[49] Sometimes, it means the amount required to restore the plaintiff to the position as if they had not made the purchase, if the plaintiff proves that they would not have entered into the transaction without the misrepresentation having been made.
[149]
[94] This somewhat truncated historical analysis, however, begins to move away from the precise context which falls for decision in the present case, which is whether there is a duty of care in tort owed by a manufacturer to a purchaser of an article such as the boat in this case to guard against the risk of damage to the boat itself, as pure economic loss.
[150]
[95] There is no precise case on point in either the High Court of Australia, or the Court of Appeal of Queensland. There is a case on point in the Appeal Division of the Supreme Court of Victoria: Minchillo v Ford Motor Co of Australia.[50] However, since that case was decided, the High Court has rejected the notion of proximity as a conceptual determinant of the existence of a duty of care against liability in the tort of negligence for pure economic loss. So, it is possible to argue against the authority of that case as either binding or persuasive authority.
[151]
[96] Before turning to other Australian authority, there are a few other observations to be made about cases from overseas. First, one of the closest comparator cases is from the Supreme Court of the United States of America: East River Steamship Corp v Transamerica Delaval Inc.[51] Some care is always required in the application of American cases, because there are many differences between the development of the law of tort in those jurisdictions and in Australia. Nevertheless, that case involved the development of the law in a marine context, being United States admiralty jurisdiction, and the liability of a builder of a ship for the defective quality of the propulsion system of the ship to a purchaser of the ship from the original owner. It was held that the ship builder did not owe a duty of care to the purchaser. The dispositive factor, above others, was that the court took the view that liability for defects in the quality of the ship itself belonged in the sphere of contractual warranty and not in the law of tort.
[152]
[97] Secondly, although Bertram relies on it in this case, one of the English cases in support of the possibility of the existence of the duty of care for which the plaintiff contends is Junior Books Ltd v Veitchi,[52] where it was held that a sub-contractor was liable to a building owner in the tort of negligence for the defective design and construction of a specialist floor which because of the defects could not be used for the owner's intended purpose. This case has been much analysed and criticised in subsequent cases. It has never been formally overruled, but it may fairly be said that it probably represents an infirm foundation from which to argue for an extended scope of the common law's reach in recognition of a duty of care in a new category of case.
[153]
[98] A full discussion of the point is unnecessary to decide this case, but in Candlewood Navigation Corporation Ltd v Mitsui OSK Lines & anor[53] the Privy Council discussed the breach of the general limit against economic loss which previously existed under Cattle in the light of both Caltex Oil and Junior Books, and also considered the Canadian decision of Rivtow Marine Ltd v Washington Ironworks,[54] which was discussed in Caltex Oil, and is relied on by Tarangau.
[154]
[99] As recently as 2011, the Court of Appeal in England and Wales revisited the question of the duty of care in tort of a builder to the original contracting owner in Robinson v PE Jones (Contractors) Ltd.[55] In the leading judgment, Jackson LJ referred to many of the well known British cases and concluded that "absent any assumption of responsibility, there do not spring up between the parties duties of care co-extensive with their contractual obligations".[56] However, it must be remembered that the retreat of the Scottish and English common law in this area from the view which sustained Junior Books means that Bryan is not good law there. As well, the High Court of Australia, in articulating the Australian common law, has not moved to adopt the English or Scottish formulations of principle to take the place of proximity as a conceptual determinant of the existence of a duty of care.
[155]
[100] Like the House of Lords and the High Court of Australia, the Supreme Court of Canada has struggled in formulating modern principle for the assessment of whether a duty of care against purely economic loss arises in novel categories of case. Above others, one recent case, Bow Valley Husky (Bermuda) Ltd v Saint John Shipbuilding Ltd[57], considered the question of a duty of care owed by a shipbuilder to the hirers of an oil rig. The claimants were neither original nor subsequent purchasers - they were hirers of the rig - and their claims were for pure economic loss in the category of relational economic loss. It is important to keep in mind that Canada has not abandoned proximity as a conceptual determinant for a new category of case, and the methodology of analysis in that jurisdiction is not consistent with recent Australian case law. However, in finding that the shipbuilder did not owe a duty of care, the most important factor was that the relational purely economic loss of the hirers was not a loss which attracted a duty of care largely because of the problem of indeterminacy.
[156]
[101] At least from the beginning of the 1980s, in my view, relevant discussion of principle and authority by a Judge at first instance in Australia should be brought onshore, reflecting the separate development of the common law of Australia. Not surprisingly, there is no decision of the High Court of Australia which deals with the existence of a duty of care in a cognate context, which makes the determination of whether a duty of care is owed one which must proceed from statements of principle made in analogous circumstances, but not precisely like those of the present case.
[157]
[102] As already mentioned, the common law of Australia has jettisoned the concept of proximity as a touchstone of the existence of a duty of care in negligence against purely economic loss. That makes it more difficult to reason by analogy from earlier decided cases as to the existence of a duty of care in a novel category of case.
[158]
[103] As if this were not confusion enough, Trade Practices Act liability for misleading or deceptive conduct overlaps. It does so on the footing that a misrepresentation which is a statement of fact that is wrong may be misleading or deceptive. And a statement of opinion which does not have reasonable grounds may be misleading or deceptive. So, few relevant cases have explored the scope of a tortious duty of care in negligence with any care, and none at the highest level.
[159]
[104] With that over-long introduction, the cases which must be the most influential in deciding the present question are: Caltex Oil, Minchillo v Ford Motor Company of Australia Ltd[58], Bryan v Maloney[59] and Woolcock Street Investments Pty Ltd v CDG Pty Ltd[60]. As well, it will be necessary to mention the principle which informs Voli v Inglewood Shire Council[61].
[160]
[105] Caltex Oil is the starting point. It has significance for two reasons: first, it was the case which breached the dam against liability in the tort of negligence for purely economic loss outside the category of liability for negligent misstatement; secondly, the "salient factor" approach derived from the analysis of Stephen J as to the existence of a duty of care commands the greatest acceptance in Australia as the approach to be taken in analysis of the question of the existence of a duty of care in a novel category of case. A third point to be noticed is that the contract for the supply of the dredge's services was not considered relevant to the conclusion which was reached.
[161]
[106] Minchillo was next in time - it was decided before Bryan. The plaintiffs were the owner (and lessor) of a truck and the lessee under a chattel lease. The owner had bought the truck from a dealer. The truck was defective because it vibrated excessively due to a design fault. The dealer was liable to the owner for breach of the implied term of the contract as to merchantability but was insolvent. The relevant question was whether the manufacturer owed a duty of care in tort for negligence to the plaintiffs. All members of the Appeal Division of the Supreme Court of Victoria answered that question in the negative. Ormiston J did so because the preferable conclusion was that there was not "in the High Court judgments support for the proposition that a chattel manufacturer owes a duty to any ultimate user who suffers economic loss from faulty manufacture". Brooking J was equally forthright:
[162]
"We should adopt the view that has now three times been expressed in the House of Lords, beginning with the Junior Books case itself, that as regards goods which are merely defective in quality as opposed to dangerous manufacturers are under no general duty of care towards consumers."
[163]
[107] Bryan is an analogous case to the present in some respects. The plaintiff was a subsequent purchaser of a house built by the defendant for an earlier owner. The claim was for purely economic loss for defects in the construction of the house which resulted in the house cracking. A duty of care was owed by the defendant to the plaintiff.
[164]
[108] Woolcock was another case with some analogous features. The plaintiff was a subsequent purchaser of a warehouse designed by the defendant for an earlier owner. The claim was for purely economic loss for defects in the building which resulted in the building cracking. No duty of care was owed by the defendant to the plaintiff.
[165]
[109] Of course, neither case concerned the liability of a manufacturer of a chattel to a subsequent purchaser. Even in the context of building construction and design, the result in Bryan did not extrapolate to Woolcock. It is appropriate to mention some of the reasons why.
[166]
[110] By the time Woolcock was decided, there had been a number of developments which affected the potential application of the reasoning or result in Bryan in the Woolcock context. First, the dispositive reasoning in Bryan deployed the concept of proximity as a conceptual determinant of the existence of a duty of care which later cases rejected. This was commented upon in Woolcock, but the High Court did not determine in Woolcock that Bryan was wrongly decided. Secondly, a number of decisions at intermediate appellate Court level had remarked upon the difficulties of applying the reasoning in Bryan and also how that reasoning might operate inconsistently with other law in different contexts. Thirdly, statute law had largely overtaken or supplemented liability in negligence under the Bryan duty.
[167]
[111] The most important "salient factor" in Woolcock was the discussion of the concept of vulnerability. Vulnerability in this context refers to a plaintiff purchaser's inability to protect themself by appropriate contractual provisions from their vendor. In Woolcock, the absence of vulnerability negated a duty if care. That factor was not given significance in Bryan.
[168]
[112] Another important factor which distinguished Woolcock from Bryan concerned the terms of the contract between the defendant and the original purchaser. In Bryan, the contract between the builder and the original purchaser was found to be one under which the builder undertook the obligations as to quality of the works and responsibility in contract to the original purchaser which were consistent with the obligation sought to be imposed by the duty of care. In Woolcock, that feature was not present and the lack of a corresponding obligation to the original purchaser in contract was one of the dispositive factors.
[169]
[113] There is another factor of potential importance, in my view, when the discussion shifts from a contract for construction of a dwelling house, of the kind dealt with in Bryan, to a contract to purchase goods sold by their description by a dealer who first acquires the goods from the manufacturer, as in this case. Manufacturers of goods often provide express warranties as to the quality of products which they supply to a dealer for re-sale. The warranty structure provides terms as between the manufacturer and the first purchaser from the dealer, to the extent that they may have a contractual character. The warranty terms will also often be reflected in the contractual obligations and rights as between the dealer and the manufacturer which stand behind the obligations which the dealer will assume to the first purchaser from the dealer under the agreement to supply the goods to the first purchaser.
[170]
[114] These arrangements frequently involve express contractual provisions which vary and limit the obligations which might otherwise be assumed by the manufacturer and dealer respectively under a contract for the sale of goods. It is a common-place, in the context of such arrangements, that the benefit of the warranty may be limited to the first purchaser from the dealer, although in other circumstances a warranty may be transmissible to a subsequent purchaser. In either case, the benefit will operate for a limited time or extent of use. The intention is to confer the benefit and to limit the exposure of the manufacturer and the dealer under the warranty.
[171]
[115] As a matter of generality, such arrangements are so common that provisions were introduced under the Trade Practices Act which affected them. Those provisions are continued under the Australian Consumer Law. Their present relevance is as a statutory recognition that, inter alia, contracts between manufacturer and dealer and first purchaser from the dealer contain provisions which affect and limit the rights of a first purchaser as against the manufacturer.
[172]
[116] The significance of that point is that if the law of torts were to recognise a duty of care owed by a manufacturer to exercise reasonable care in manufacture to a first purchaser from a dealer it could do so in a fashion which is inconsistent with the contractual limits of liability which have been agreed between the parties. The possibility arises, as the United States Supreme Court elegantly put it in East River, for "contract to drown in a sea of tort".
[173]
[117] The potential impact or effect of the imposition of a duty of care upon such contractual arrangements was considered in both Bryan and Woolcock. In Bryan, the particular contract was held not to negative the existence of a duty of care. In Woolcock it was held unnecessary to determine the point.
[174]
[118] Tarangau's strategy to circumvent or except itself from these concerns is to formulate a duty of care that is coterminous with the duty of care which is owed by a manufacturer to users of an article in relation to the risk of personal injury or other physical damage. By framing the duty as one which arises to take reasonable care to prevent the boat from presenting a danger of injury to users of the boat, Tarangau contends that the duty is not only recognised in law but also is one which must prevail over any contractual limit of the responsibility of the manufacturer under the terms of the manufacturer's warranty.
[175]
[119] In doing so, Tarangau is able to enlist the support of cases as to the existence of a duty of care against physical damage of which Voli is the leading example. The liability in Voli was that of the designer of a structure to persons who were injured when it collapsed. It was argued that the contract which regulated the liability of the designer to the owner of the premises negated a duty of care in tort to those injured in the collapse. The contract was relevant to the existence of a duty of care but did not negate it. However, the context was liability for physical loss or damage, including personal injury. The present case is about purely economic loss.
[176]
[120] Tarangau's contention is one which did not arise directly or by direct analogy in either Bryan or Woolcock. The building in each of those cases was not in a condition to render it unsafe for habitation. However, the point was discussed in Bryan to some extent.
[177]
[121] The contention is readily sourced in the reasons of Laskin J in Rivtow, on which Tarangau relies. That case has analogous features to the present case. The first defendant designed and manufactured a crane installed on a barge chartered by the plaintiff. The second defendant was the exclusive distributor of the crane. The crane was defective and cracking presented a serious risk of collapse and damage in its operation. But it was repaired before any physical damage occurred to other property or any person. At the time of installation, the defendants knew of the defect in design. The plaintiff claimed to recover against both defendants for negligence. It succeeded on a claim for the economic loss caused by the barge being out of service during the period of repair, on the basis that the defendants had engaged in negligent misstatement of the crane's properties. However, by majority, the Supreme Court denied the claim for the cost of repairs to the crane itself, on the ground that there was no duty of care owed against liability for economic loss constituted by the defects in the crane itself.
[178]
[122] Laskin J, in dissent on the last point, would have accepted the existence of a duty of care against economic loss caused by breach by the designer and manufacturer of the crane:
[179]
"[The manufacturer] was under an anterior duty to prevent injury which foreseeably would result from its negligence in the design and manufacture of this piece of equipment. If physical harm had resulted, whether personal injury or damage to property (other than to the crane itself), [The manufacturer's] liability to the person affected, under its anterior duty as a designer and manufacturer of a negligently produced crane, would not be open to question. Should it then be any less liable for the direct economic loss to the appellant resulting from the faulty crane merely because the likelihood of physical harm, either by way of personal injury to a third person or property damage to the appellant, was averted by the withdrawal of the crane from service so that it could be repaired?"
[180]
[123] Three things must be said about this proposition. First, as a matter of authority, this statement was made in dissent. Later cases in the Supreme Court of Canada have relied on it, but without arriving at a settled position in that jurisdiction, in my view. It is not useful, in the present context, to map the Canadian position more closely.
[181]
[124] Secondly, the same concept was relied upon by the majority in Bryan. The plurality said:
[182]
"It is difficult to see why, as a matter of principle, policy or common sense, a negligent builder should be liable for ordinary physical injury caused to any person or to other property by reason of the collapse of a building by reason of the inadequacy of the foundations but not be liable to the owner of the building for the cost of the remedial work necessary to remedy that inadequacy and to avert such damage".[62]
[183]
[125] To that extent, it provides some support for Tarangau. Against that, Bryan was decided by reference to the now abandoned concept of proximity as a conceptual determinant of the existence of a duty of care. Also, there was an express acknowledgement in the reasons of the plurality, in Bryan, that:
[184]
"In particular, the decision in this case should not be seen as determinative of question whether a relationship of proximity can, in some circumstances, exist between the manufacturer and the purchaser or subsequent purchaser of a chattel in respect of the diminution in the value of the chattel which is sustained when a latent defect in it first becomes manifest."[63]
[185]
[126] Thus, Bryan, did not decide or express a view on the question of the existence of a duty to take reasonable care to avoid economic loss in relation to the acquisition of a chattel because of the defective quality of a chattel, either generally, or in specific circumstances.
[186]
[127] Thirdly, however, it is notable that while Laskin J in Rivtow expressly considered whether the imposition of a duty of care would create indeterminate liability, his Honour did not consider whether the duty of care which he was prepared to accept operated consistently with the law of contract or would create any difficulties on that account. That consideration must be one of significance in a case like the present.
[187]
[128] "Indeterminacy", the concept referred to in different language in respect of relational loss as long ago as Cattle, is in some cases a factor against the imposition of a duty to take reasonable care against purely economic loss, these days usually by reference to Cardozo CJ's luminous statement of principle taken from Ultramares proscribing: "liability in an indeterminate amount for an indeterminate time to an indeterminate class". But, in my view, the focus on that factor in the analysis of Laskin J in Rivtow does not exhaust or negate the proper consideration of the consistency of the imposition of a duty of care with the contracts that operate among relevant parties.
[188]
[129] The coherence of a suggested development of common law has proved influential in other contexts where the scope of the expansion of torts law has run into a potential inconsistency with another legal norm. A leading example is Astley v Austrust Ltd[64] where the existence of concurrent duties of care in contract and tort was considered further, following Hawkins v Clayton. The argument that a tortious duty to take reasonable care negates a corresponding implied term under contract was rejected. The majority judgment referred with express approval[65] to a passage from Lord Goff of Chievely's speech in Henderson v Merritt Syndicates which included the following:**
[189]
"I do not find it objectionable that the claimant may be entitled to take advantage of the remedy which is most advantageous to him subject only to ascertaining whether the tortious duty is so inconsistent with the applicable contract that, in accordance with ordinary principle the parties must be taken to have agreed that the tortious remedy is to be limited or excluded."
[190]
[130] This is consistent with how the point was dealt with in Bryan. The plurality reasoned that "in some circumstances, the existence of a contract will provide the occasion for, and constitute a factor favouring the recognition of a relationship of proximity under the ordinary law of negligence". But, importantly, continued[66]:
[191]
"In other circumstances, the contents of a contract may militate against recognition of a relationship of proximity under the ordinary law of negligence or confine, or even exclude the existence of a relevant duty of care."
[192]
**[131] Not surprisingly, given the reasoning in Woolcock, both parties in the present case invoked vulnerability as a central plank of the analysis of the existence of a duty of care.
[193]
[132] It might have been expected that Bertram would do so. It submits that the purchaser of a $2.2M boat intended for some commercial deployment or use can protect itself by contractual promises as to the quality or performance of the thing purchased. It also specifically relies on the inconsistency between the limited obligations under the terms of the express warranty given by Bertram and the extent of the obligation alleged by Tarangau in negligence.
[194]
[133] Tarangau contends that Bertram would not have accepted any contractual liability beyond the terms of the express warranty. Because of that, Tarangau submits, it was vulnerable. This seems to suggest that the role of tort liability in negligence may be to override any express agreement which the relevant parties may have made to allocate the risk of economic loss between them in contract. That is an extraordinary contention, having regard to the role of contract in excluding a relevant duty of care, as discussed in the cases.
[195]
[134] Perhaps Tarangau's approach came from Barclay v Penberthy, where an employer recovered economic loss caused by the loss of the services of its employees who were killed in an air crash caused by the negligence of the defendant air carrier's employed pilot during a charter flight. On the question whether the defendant owed a duty of care against economic loss to the employer, reference was made to the absence of evidence that the employer could have successfully negotiated for the inclusion of a term in the charter contract to protect itself against economic loss. The High Court plurality reasoned that "it was not incumbent upon the [employer] to establish that it could not have bargained with [the defendant] for a particular contractual provision. The presence or absence of a claim in contract would not be determinative of the claim in tort."[67]
[196]
[135] Returning to the present problem at a level of abstraction, let it be assumed that in the performance of skilled work to manufacture a thing there is a contract between the parties which excludes the liability of the manufacturer to the first purchaser for economic loss in relation to the thing sold, including any liability in tort for negligence. Statute apart, in my view, generally speaking, the common law would not impose a duty to take reasonable care against such loss which would operate inconsistently with the express contractual agreement. It permits the parties to make their own agreement as to liability for loss of that kind.
[197]
[136] However, a second or subsequent purchaser would not be affected by the manufacturer's contract with the first purchaser. According to Tarangau's case theory, Tarangau is vulnerable because Bertram would not agree to accept liability for economic loss in relation to the boat as the thing sold. And that vulnerability is said to support the existence of a duty of care. To my mind, that inverts the role of vulnerability in a context such as this.
[198]
[137] A purchaser of goods has a vendor from whom it can require appropriate terms, or choose not to buy. However, if it is not a party to that contract, a manufacturer is not able to protect itself from liability for economic loss in relation to the thing sold by a first purchaser to a second or subsequent purchaser by contractual terms. On Tarangau's case theory, Bertram's refusal to accept liability in contract (noting that it is not a party to the contract with the second or subsequent purchaser) for that kind of loss becomes a reason to impose a duty of care rather than a reason not to impose a duty of care.
[199]
[138] In my view, such an approach to vulnerability is fundamentally flawed. In terms of vulnerability, Tarangau's contentions leave a manufacturer vulnerable to subsequent purchasers for liability which an original purchaser has agreed to waive. A subsequent purchaser has a choice not to buy if its vendor won't give a warranty as to economic loss of that kind. But on Tarangau's case theory, it gets to make that choice with the benefit of the manufacturer's potential responsibility in tort for breach of a duty to take reasonable care as alternative or additional protection.
[200]
[139] In my view, Tarangau's appeal to the concept of vulnerability is unsustainable. However, vulnerability is but one "salient factor", although it may prove determinative, as it did in Woolcock.
[201]
[140] As previously mentioned, Tarangau placed heavy reliance upon the reasons of the majority of the Full Court of the Federal Court of Australia in Dovuro Pty Ltd v Wilkins, in particular the reasons of Finkelstein J at [121] - [138], where his Honour opined that "there is no impediment to allowing recovery against a negligent supplier of a defective product of the cost incurred in avoiding or reducing the risk of physical harm that may be caused by the product".[68]
[202]
[141] There are problems with those reasons as a matter of authority. First, the reasons of the majority were obiter dicta, because the case was disposed of on the basis that the defendant had conceded the existence of a duty of care at trial and was refused leave to withdraw that concession on appeal. Secondly, the judgment or order of the Full Court was set aside in the High Court of Australia, so the reasons of Finkelstein J and the separate reasons of Branson J would have no value as a matter of precedent.
[203]
[142] However, even if those matters were not present, I would still have had difficulty with some of Finkelstein J's reasoning. His Honour approached the question of a duty of care through the prism that the "great fear of the common law" was about indeterminacy.[69] That is often an important factor in this context, but it is only one salient factor. Secondly, the historical analysis of the course of English authority in paras [126] to [131] of his Honour's reasons is incomplete, in my view, although I recognise that his Honour most likely did not intend that it should be complete.[70] Thirdly, the central point his Honour made was rhetorical: "there is no reason why a plaintiff who takes steps to avoid damage to his property should be worse off than a plaintiff who actually suffers damage to his property".[71] To frame the questions at that level of generality and to answer the question by the reasoning employed by his Honour, is of no great assistance in resolving the question of whether a duty of care is owed in a case like the present. As Gibbs CJ said in Caltex:
[204]
"It may be right to say, as Lord Devlin said, that the distinction between recovery for economic loss and recovery for material loss is illogical, but that does not mean that the decisions that have drawn that distinction were erroneous, because the law aims at practical justice rather than logical consistency."[72]
[205]
[143] Fourthly, his Honour overlooked Bow Valley even though that case was referred to by Gyles J, who would have rejected the existence of a duty of care.[73]
[206]
[144] "Floodgate" arguments have been rejected at various points of the development of the common law. I recognise that contract "drowning" in a sea of tort, the metaphor chosen by the United States Supreme Court in East River, is a form of floodgate argument. But there is recognition of the extent of the impact of recognising additional pathways and duties of care in negligence in Astley, in the High Court's description of "the imperial march of modern negligence law"[74].
[207]
[145] Already, these reasons have gone on too long. The analysis demonstrates, in my view, the formidable task faced by Tarangau in making out a duty of care as alleged, as a matter of law. But, for all that, it seems to me that the conclusion which should be reached in the present case is that for the purpose of a summary judgment application the question of the existence of a duty of care is of sufficient difficulty that it should be resolved at trial, not in the absence of full argument as to the points raised above. Although it is a near run thing, in my view at this stage Tarangau does have a real prospect on success on the alleged duty of care and the claim for damages for negligence which depends on that duty of care.
[208]
[146] From the foregoing reasons, the orders which should be made are that Tarangau has leave to amend the claim and Bertram's application for judgment on part of Tarangau's claim is dismissed.
[51][1986] USSC 130; (1986) 476 US 858. It was referred to in Bryan v Maloney. It was also referred to in argument in Woolcock, but not in the reasons of the members of the Court. It was referred to with approval in Murpy v Brentwood District Council[1991] UKHL 2; [1991] AC 398.